India Case Study: Novartis’ Galvus Inches Closer To Merck’s Januvia As Battle For Brand Supremacy Rages On

Three years after Novartis and MSD launched their DPP-4 inhibitors in India, PharmAsia News takes a closer look at who will come out on top.

MUMBAI – Two global pharmaceutical companies – both with considerable experience building powerful brands; both determined to maximize market share in India; both claiming brand superiority; neither wanting to be outclassed by the other – who are they? If you ask that question today to Indian pharma executives most would probably point to Merck & Co. Inc.’sIndian arm MSD, which sells blockbuster anti-diabetes DPP-4 Januvia (sitagliptin), and Novartis India Ltd., which makes and sells Novartis AG’s competing DPP-4 Galvus (vildagliptin).

This battle for supremacy in the burgeoning Indian diabetes market is viewed by many as a case study for future branding strategies – what should be done and what could go wrong.

Hare And Tortoise Race?

Roughly three years after the two brands hit Indian shores, results suggest brand positioning, pricing formulas, strategic alliances, and most importantly, reach will help distinguish the winner (Also see "Big Brand Fights Come To India As Januvia, Galvus And Onglyza Vie For Market Share" - Scrip, 2 Jun, 2010.).

Although analysis shows Januvia still tops the charts in sales based on moving average turnover (MAT), vildagliptin is steadily trending stronger over the last few months.

Data obtained from pharmaceutical market research and intelligence agency AIOCD AWACS reveals that in 2008, its launch year, Januvia notched up record sales of Rs. 34 crore ($6.5 million) and along with its metformin combination Janumet, the total earnings from sitagliptin was as much as Rs. 40 crore ($7.6 million).

On the other hand, Galvus – introduced four months after Januvia – had a gentler climb reaching Rs. 12 crore ($2.2 million) in its first year.

But more remarkable is the growth that the two brands achieved over an 18-month period after launch. Sales nearly trebled to touch Rs. 96 crore ($18 million) for Januvia while vildagliptin doubled its score to Rs. 24 crore ($4.5 million).

Now fast forward to 2011. In the first nine months of the year, sitagliptin and its metformin combinations grew by 31% – not a bad performance considering its high base – but only half of the 62% growth it recorded during 2010.

In contrast, vildagliptin sales as a class grew at a scorching 108% during the same period. Total sales for Januvia and Janumet were at Rs. 204.39 crore ($39 million) on an MAT basis and for the vildagliptin class and its combinations, sales were Rs. 161.57 crore ($30 million).

In other words, the gap between the two brands is narrowing quickly.

Januvia’s Great Start = Advantage Galvus

Mamta Shah, head of marketing at AIOCD AWACS, says Januvia and its combinations will need to move deeper into newer areas and increase the “noise level” to make a bigger dent in the very DPP-4 market that it created. Another marketing consultant, however, pointed out that these are still early days to judge which of the two brands will win in India.

Merck carefully carved out a “responsible pricing” strategy in India that connected with doctors and patients, winning it a high level of credibility in the community.

Experts appear uncertain primarily because the competitive landscape for the DPP-4 class has emerged rapidly in India. It was a dream take-off for Januvia three years ago. With the therapeutic advantages of a breakthrough first-in-class compound, backed by Merck’s reputation for demonstrating greater clinical benefits, Januvia earned rave reviews from Indian specialists.

Added to that mix, Merck carefully carved out a “responsible pricing” strategy in India that connected with doctors and patients, winning it a high level of credibility in the community. The company broke new ground in primary care by pricing Januvia at one-fifth of the U.S. price – a bold move that compelled competitors to lower pricing of other brands, including Galvus.

To embellish its early gains, Merck also experimented with an unheard of concept in India - a comprehensive disease management program called Sparsh (or “touch” in Hindi) to assist diabetics in achieving desired glycemic controls. Everything seemed to work, as doctors continued to endorse Januvia and prescription volume took off.

Novartis executives sensed that to take on an established brand like Januvia, the Swiss pharma needed to have deeper penetration across the country rather than simply focusing on big cities.

But it was not so easy to write off Galvus. With decades of experience in the Indian market - unlike Merck, which had only a few years after its re-entry into India in 2005 - Novartis executives sensed that to take on an established brand like Januvia, the Swiss pharma needed to have deeper penetration across the country rather than simply focusing on big cities.

Allies Boost Numbers, Noise

Novartis found allies in [USV Ltd.], India’s number one company in the oral anti-diabetes drugs segment, and Piramal Enterprises Ltd., which had one of the largest armies of medical representatives across India. Under separate deals, Novartis allowed USV to market vildagliptin under the brand Jalra, and the Piramal Healthcare team – now part of Abbott Laboratories Inc. – markets vildagliptin as Zomelis (Also see "Novartis Aims Double Edged Attack With Galvus And Jalra To Take On Merck's Januvia In India" - Scrip, 6 Nov, 2008.).

Not leaving anything to chance, Novartis also emulated Merck and decided to kick off its own patient management program under the name Praayas, which means “endeavour” in Hindi. (Curiously, Prayas, spelled slightly differently but having the same meaning, is also the name Sanofi chose for its recent marketing initiative in Indian Tier II cities.)

“The idea has been to expand fast into the oral anti-diabetes market and make doctors aware of the latest treatment options,” says a senior Novartis official.

The game plan, it seems, has worked.

Information shared by global pharma sales audit firm IMS Health shows that during the first quarter of 2010, both sitagliptin and vildagliptin brands had an equal share of the DPP-4 market in India. A year later, the ratio has tilted in favor of the vildagliptin brands, which now commands over 55% market share while sitagliptin’s share has shrunk to 36%, while the remaining 9% is cornered by Onglyza (saxagliptin), marketed by AstraZeneca Plc. and Bristol Myers Squibb.

A Class Product Goes For The Masses

Sanjiv Navangul, sales and marketing director, MSD India, says Januvia, with its distinct medical profile, will continue to be an important product as its long-term benefits are significantly higher than other marketed diabetes products.

Navangul, who is largely credited for building the foundation of the marketing team at MSD India, says his company created a new treatment paradigm with Januvia and will continue to work to enhance its relevance to patients. One way to achieve those objectives, Navangul stressed, is capacity building by way of a greater interface with doctors and by partnering with key opinion leaders.

Without naming any specific company, Navangul cautioned that market competition should not degenerate into issues like gaining higher share of voice and muscle power (Also see "Western Companies' Perspectives On Emerging Markets: Execution Trumps Strategy - PharmAsia Summit" - Scrip, 29 Nov, 2010.).

Although MSD may have been slow in identifying partners to help promote Januvia in India, it may be tough to dislodge the company from the top spot. In April, MSD surprised analysts by teaming up with Sun Pharmaceutical Industries Ltd. to market sitagliptin in India (Also see "On Heels Of Emerging Markets Deal, Merck Ropes In India's Sun Pharma To Boost Januvia Sales" - Scrip, 25 Apr, 2011.).

Given Sun’s industry-leading position in therapy areas like neurology and diabetes and its aggressive commercial reputation, MSD has signalled to its rivals that it is serious about expanding into hitherto untapped areas. Mamta Shah of AIOCD AWACS says this will be an important element in ensuring that Januvia and Janumet retain their ranks against the three vildagliptin brands of Galvus, Jalra and Zomelis.

A Lot Left To Cater

But if anything, MSD India and Novartis are just warming up. Navangul, for instance, likes to remind audiences that Januvia with metformin is approved for first-line therapy as an adjunct to diet and exercise. And going by the numbers, there is a lot of potential upside.

AIOCD AWACS data suggest that as of September 2011, the diabetes medicine market in India stands at Rs. 3,519 crore ($673 million) which boils down to about 6.07% of the total Indian pharmaceutical market of Rs. 57,968 crore ($11 billion). Of that, the oral diabetes market was at Rs. 2,583 crore ($494 million) dominated by USV and followed by Sun Pharma at number two. Closely following are MSD, Piramal, Sanofi, Lupin Ltd. and Novartis.

IMS Health data show that the DPP-4 segment as part of the entire oral anti-diabetes drugs category is just 13%. That leaves a lot of room for the two brands to fight over in India.